Alabama Power

Groups Ask PSC to Reconsider Alabama Power’s Unprecedented Gas Expansion

Gasp and Energy Alabama have formally asked the Alabama Public Service Commission to reconsider its June decision to approve the single largest capacity increase ever proposed by Alabama Power, including including almost 1,900 MW of gas generation. We requested a rehearing to consider updated testimony in light of economic forecasts showing lessened electric demand due to the coronavirus pandemic (COVID-19).

Last year, Alabama Power filed a “Petition for a Certificate of Convenience and Necessity” with the Alabama Public Service Commission. That proposal initially sought to add nearly 2.4 gigawatts of new generating capacity — which would cost customers over $1.1 billion. Energy Alabama and Gasp, represented by the Southern Environmental Law Center, intervened in the docket to question Alabama Power’s lack of evidentiary support to build and buy such a significant amount of new gas resources.

In March, just before COVID-19 brought the world as we know it to a halt, the Alabama Public Service Commission held a series of hearings on the petition. Witnesses for Gasp and Energy Alabama exposed exposed significant flaws in Alabama Power’s planning and justification processes. After those hearings concluded, we made several key points in our proposed order filed with the Commission:

  • Alabama Power failed to produce the evidence necessary to support its request to increase electric generation capacity by almost 20%. The utility had previously asserted it wouldn’t need new generation sources until 2035.
  • Without a showing of need, Alabama Power’s request amounts to an effort to build rate base and enrich shareholders at the expense of its customers, who will pay for expensive, unnecessary generation for decades.
  • Alabama Power’s own analysis showed that the proposed solar plus battery storage projects were the cheapest options for customers.

The pandemic and subsequent economic downtown have cast even more doubt on Alabama Power’s supposed need for new capacity. In early June, we filed additional information regarding anticipated economic effects of COVID-19, arguing that the economic downturn precipitated by the pandemic called into question the magnitude and timing of Alabama Power’s claims about needing additional power sources. Alabama Power relied on outdated projections from more than two years ago, well before the economic devastation wrought by COVID-19. We argue those projections can no longer serve as the basis for a making a $1.1+ billion investment with customer dollars.

Despite all of that, the PSC in June unanimously voted to approve everything in Alabama Power’s proposal, including almost 1,900 MW of gas generation, except Alabama Power’s proposed solar plus battery storage projects. The PSC said they were not well-suited to meet Alabama Power’s reliability needs, despite the overwhelming evidence that supported their approval. However, the Commission refused to ask for supplemental information from Alabama Power as to whether its petition was still warranted.

Alabama customers already pay some of the highest electric bills nationwide. (A recent report found that people in Birmingham have the highest energy burden in the nation.) COVID-19 has only worsened the plight of customers struggling to pay monthly bills. If they want to move forward with these monumental investments, Alabama Power should not be allowed to put the entire financial burden on customers. Utility shareholders should bear the risk that the projects may become stranded assets before the end of their useful lives.

We also hope the Commission will reconsider its denial of the solar-plus-storage projects, which were the most economic options according to Alabama Power’s own analysis. That was just the latest in a long line of anti-solar decisions from the Commission. In September, the Alabama Public Service Commission dismissed our challenge against Alabama Power’s discriminatory solar charge, instead approving an increase in the charge.

By denying Alabama Power’s proposed solar-plus-battery storage projects in this docket and then approving an increase to Alabama Power’s unjust solar fee on rooftop solar customers in another, the PSC continues to deny Alabamians the benefits of clean, renewable energy like solar. Alabama has less solar capacity than other states in the sunny South, and far fewer jobs as a result of the PSC’s decisions.

Alabama Public Service Commission Backs Alabama Power’s Tax on the Sun

2020 has been a bad year, especially if you’re an Alabama Power customer.

The Alabama Public Service Commission (PSC), never content with how many favors it can give Alabama Power, added insult to injury today when it upheld Alabama Power’s sun tax. As many of you know, Alabama Power taxes small scale solar at one of the highest rates in the country; $5/kilowatt/month, or about 50% of the money you could expect to earn from your system. It is currently unclear if the Commission’s vote today actually INCREASED the sun tax.

In other words, the supposed supporters of small government at the PSC chose to institute an approximate 50% tax on solar for homes and small businesses in order to protect the monopoly of one the largest and most profitable companies in the state.

How the PSC Fails Alabamians

This is not the first questionable decision the PSC has made this year. Here are a few lowlights:

  1. The Commission failed to take any action to protect customers from disconnections or late fees amid COVID-19. Advocates like Energy Alabama had to force Alabama Power to protect consumers, but the PSC claimed its closed doors talks with utility executives were good enough and no action was needed.
    • By the way, Alabama Power is restarting disconnections soon, despite its parent company earning almost $5 billion in net income last year alone.
  2. The Commission ruled in favor of Alabama Power, allowing it build expensive and unneeded gas, and punted on solar and energy storage projects despite them being the most cost effective.
  3. The Commission allowed Alabama Power to overcharge customers for fuel by more than $100 million until a group of advocates, including Energy Alabama, called them out on it. Under fire, the Commission finally did the right thing and refunded customers most of the money.
  4. The Commission, in an attempt to legislate from the bench, is actively blocking the recording of hearings and the use of electronic devices.
  5. And then today, the Commission backed Alabama Power’s tax on the sun. Alabamians of all political stripes want more low-cost renewable energy but the PSC has decided it knows better than the people.

Again, this is just 2020.

The Cost of Being a Puppet

The Alabama PSC has proven itself to be not much more than a puppet for Alabama Power. For instance, the solar tax complaint was first filed back in April 2018, yet it took the PSC more than two years to decide the case. However, Alabama Power was able to file for one of its largest expansions in history and get it approved, all before the solar tax case was decided. If Alabama Power wants it done, it gets done. If the people want it done, nothing happens.

There are real world consequences to all of this deference to Alabama Power. First off, real economic harm is being done to the people of Alabama and many of our small businesses. Our utility bills are some of the highest in the nation, the proportion of income Alabamians spend on electricity is one of the highest in the nation, and we have the worst energy efficiency in the country. But rather than make any of these problems better, the Commission continues to green light expensive and unneeded construction, allow high taxes on alternatives, and ignore any efficiency. Alabama Power does not want any of these things because it would rather you remain forcibly and 100% dependent on them.

Bluntly, the decisions of the PSC are contributing to poverty in Alabama, rather than alleviating it. Alabama has a history mired in poverty and we need our energy policy to help us break that cycle. Favoring monopolies and Wall St. over low-cost distributed energy perpetuates the struggle of hundreds of thousands of hard-working Alabamians.

Photo credit: Pat Byington

And secondly, Alabama is losing out on tens of thousands of good paying jobs in advanced energy stemming directly from PSC decisions. There are tons of folks who could be employed in the energy efficiency sector, making much needed upgrades to our built environment and infrastructure. Renewable energy, such as solar and wind, are some of the fastest growing sectors of the economy in most states, but not Alabama.

Twinkle Cavanaugh, the PSC President, has often touted jobs in statements to Alabama Power-supported outlets like Yellowhammer News, in campaign materials, and even from the dias during PSC meetings. We’d encourage her to actually take her own words seriously and put Alabamians to work.

Alabama Power Puts Wall St. Over Alabamians, Restarts Disconnections and Late Fees

Yesterday, Alabama Power announced it would resume disconnecting customers and charging late fees in late September, despite the company’s massive profits and the ongoing pandemic wreaking economic havoc on our state. Southern Company, the parent company of Alabama Power, made $4.7 billion in profit last year alone. Right now bad debt in Alabama and Georgia is estimated at less than $160 million, or just 4% of Southern Company’s profits from last year.

Let’s put this all in perspective. How much bad debt is there right now?

First, we don’t exactly know. Why? Because the Alabama Public Service Commission (PSC) has refused to collect or ask for data regarding how many Alabama Power customers are behind on their bills.

What we do know is that our next door neighbor, Georgia, can tell us a lot.

Georgia Power, also owned by Southern Company, restarted disconnections on July 15. More than 15,000 Georgia Power customers were disconnected in about two weeks (July 15 through the end of the month), despite all the company’s proclamations about how great it was and all the options it said were open to consumers.

Georgia Power, which is almost double the size of Alabama Power by number of customers, told its Public Service Commission that customers were about $83.4 million behind on bills. Even if Alabama Power held just as much bad debt as Georgia Power, the bad debt among the two companies would total about $160 million.

Southern Company profits handsomely from Alabamians

Last year, Southern Company, the parent company of Alabama Power, earned a net profit of $4.7 billion. You read that right. With a B. The bad debt carried by Georgia Power from COVID-19, and likely Alabama Power, would total just under 4% of Southern Company’s net income from 2019.

Southern Company owns and operates government-backed electric monopolies in Alabama, Mississippi, and Georgia. These are not like other companies, say your local auto mechanic. It has an exclusive license to sell electricity and profit from those sales. Alabama Power has one of the highest profit rates in the country, so much so that over the last few years, it collected $1+ billion more than if its profit rate had been the national average.

To be clear, Energy Alabama is not advocating that people shouldn’t be responsible for the energy they consume. We simply believe that Southern Company and Alabama Power can and should share in the burden during these unprecedented times. Churches, nonprofits, and community groups should not be scrambling to help vulnerable Alabamians pay bills when Southern Company and Alabama Power have enjoyed years of blockbuster profits.

No one asked for COVID-19 and economic crisis we are in. We are all affected. We should all pitch in. That includes Alabama Power and Southern Company shareholders.

But there is something you can do now to help your neighbors!

We’ve joined with our friends at Gasp and hope you’ll contact Senator Doug Jones (D-AL) and Senator Richard Shelby (R-AL) and ask them to support Senate Bill 4362, which would put a federal stop to utility disconnections during COVID-19.

 

Public Service Commission Sides with Alabama Power – Time to Move Forward on Renewables, Efficiency

UPDATE: This post was updated on Friday, June 12, 2020 at 12:40 Central Time to provide more context about the Public Service Commission’s vote on Tuesday and to correct an error so that the article states the proposed solar plus storage put downward pressure on customer bills.

 

Yesterday, the Alabama Public Service Commission, led by Twinkle Cavanaugh, capitulated to demands from Alabama Power to raise your utility bill in the midst of a pandemic and unprecedented economic stress.

 

The Commission voted unanimously allowing Alabama Power to:

  • Build Barry Unit 8 (a new 726-megawatt gas plant)
  • Buy Central Alabama (an existing 915-megawatt gas plant)
  • Enter into a power purchase agreement with Hog Bayou (to buy electricity from an existing 238-megawatt gas plant)
  • Acquire 200 megawatts of undetermined Demand Side Management and Distributed Energy Resources

 

The Commission did not approve the proposed solar + storage projects (400 megawatts).

 

We will be blunt. These Commissioners do not serve Alabamians. They serve Alabama Power. They serve their campaign donors. You deserve better.

 

It is has never been enough for the greedy executives like Mark Crosswhite at Alabama Power to be one of the most profitable utilities in the country on the backs of the one the poorest states in country.

 

No. They petitioned for unneeded and expensive new generation simply because they could. Their parent company (Southern Company) is reeling from years of bad decisions in Mississippi and Georgia. Alabama Power and the Alabama Commission keep on delivering shareholder value at your expense.

 

We intervened, along with Gasp, to protect Alabamians and we were represented in this case by the Southern Environmental Law Center. Alabama Power’s own data showed that solar-plus-storage was the least cost resource and would actually put DOWNWARD pressure customer bills. Not to mention the serious and significant flaws in its planning and forecasting methods. The Commission didn’t approve the cost-effective renewables.

 

Even the Alabama Attorney General’s Office had serious concerns about the request’s impact to Alabamians and wanted Alabama Power to bear some of the risk if this request didn’t deliver for consumers. Alabama Power, of course, does not take risks. It makes you take risks. It reaps the profits from your risks. The Commission didn’t blink an eye.

 

Don’t forget that advocates filed a petition to overturn Alabama Power’s solar taxes back in April of 2018! Has the Commission acted? No. But when Alabama Power demanded something, the Commission jumped.

 

Let us be as clear as we can. We strongly disagree with this Commission’s decision to saddle Alabamians with decades of costs and practically eliminate the benefits we should be enjoying from energy efficiency and renewable energy.

 

But, Energy Alabama does not participate in these issues to waste our breath. We do not exist simply to fight utility companies.

 

We want to move this state forward. We want the jobs. We want the savings. We want the cleaner air. We want the choices for consumers. All these things are possible with energy efficiency and renewable energy.

 

This is not and has never been a partisan issue. Alabamians of all stripes want more renewable energy, not less. Polling shows strong support for renewables in Alabama among conservatives AND liberals from the Saturn V in Huntsville to the Port of Mobile.

 

If the Public Service Commission is unable or incapable of handling this issue, it is incumbent upon the legislature to act. We have seen too many neighboring southern states grow massive amounts of renewable energy jobs. In light of the economic devastation from COVID-19, we will need every last one of those jobs created in Alabama and as fast as possible.

 

If you too are ready for growth rather inaction, it is time for YOU to take action.

  1. Become an Energy Alabama member – https://alcse.org/support-energy-alabama/energy-alabama-friend/
  2. Support Energy Freedom Alabama – http://energyfreedomalabama.com/

The Alabama Public Service Commission Should Suspend Disconnections and Late Fees During COVID-19 Pandemic

Amid the devastation and heartbreak caused by the COVID-19 pandemic, the Alabama Public Service Commission (PSC) has a golden opportunity to do something truly positive. Without delay, the PSC should suspend disconnections and late fees across the entire state. And the reason is simple: It’s the right thing to do.

Many utilities have taken action voluntarily and we applaud those utilities for acting to protect consumers. Even if some of them like Alabama Power had to be dragged kicking and screaming…

Disappointingly, there are still many utilities in Alabama disconnecting customers during a global pandemic. Voluntary commitments are better than nothing, however, they are not a substitute for a legally binding order that gives customers recourse if a utility does not comply. 

Mississippi has already acted. Alabama should do the same. Not tomorrow. Not next week. But right now.

And if the PSC won’t do it, Governor Ivey must step in for the good of every Alabamian.

 

What Are Disconnections, Anyway?

For those unfamiliar with the term, a disconnection is pretty much what it sounds like. If you don’t pay your utility bill, your service typically gets disconnected. It’s as simple as that. 

But we’re not living in normal times. And in Mississippi, the PSC has taken laudable steps to protect their citizens.

Not so in Alabama.

 

Staying Home

On April 3rd, Governor Kay Ivey issued a statewide stay-at-home order that effectively shut Alabama down. Businesses were shuttered, non-essential services stopped, and millions of people immediately saw drastic changes to their everyday lives.

Issuing the order was the right thing to do, but the order came with some negative side effects. In order to beat this coronavirus, we all have to do our part – including social distancing. But for many Alabamians, staying home means missing out on a paycheck (or two or three). Not to mention the economic fallout may be with us for quite some time.

 

Paying the Bills

For many in Alabama, missing a paycheck or two can have profound consequences. After all, how long would you be able to pay for groceries and your utility bill without a steady paycheck?

Here’s the thing. If you can’t go to work, you might not have money to pay your bills. Across Alabama, we’re hearing the same story. It’s not that people want to stay home and miss work. They have to stay home – because it’s the law, because they cannot work, and because they’re trying to do their part. And because they’re obeying the law, they may not be able to work or pay their utility bills.

So why are some utility companies still shutting off people’s services right now? It’s wrong. You know it. We know it. Everyone knows it.

And the Alabama PSC needs to do something about it. If the PSC believes it cannot act because of limitations in Alabama law, it is morally obligated to air those concerns publicly. We cannot stand by and watch Alabamians suffer because of a technicality or a loophole.

 

Mississippi is Protecting Consumers

On March 15, the Mississippi PSC temporarily suspended disconnections for 60 days. The restriction applied to all water, sewer, electricity and gas services it regulated. Eleven days later, they suspended online convenience fees as well.

Not satisfied, the Mississippi’s PSC went even further by asking the Mississippi Attorney General for guidance on whether it had the authority to stop disconnections for all utilities in the state, even the municipal utilities and electric cooperatives it didn’t normally regulate. 

Bravo, Mississippi! That’s leadership. 

Now it’s time for the Alabama PSC to follow suit.

 

An Unacceptable Delay

On March 18th, Energy Alabama joined with 12 organizations calling on the PSC to issue an order suspending disconnections across the state. In Alabama, only two electric and gas utilities are normally regulated by the PSC, Alabama Power and Spire. But we called on the PSC to suspend disconnections and late fees for all utilities statewide and if it couldn’t act, we asked it to clarify what legal obstacles were present. Alabamians deserve answers and actions.

Since then, the PSC has failed to act. Since then, the PSC has failed to respond. Enough. Now is the time to do what’s right. We’ve contacted every utility in Alabama, and there are still many utilities cutting people off during this time of fear and uncertainty.

That is unacceptable.

Act now, Commissioners. You have the ability to offer much-needed relief to the people of Alabama. We trust you want to do the right thing.